Analyst Predicts 25% Potential Gain for Palo Alto Stock

PANW Stock

Palo Alto Networks (NASDAQ:PANW) is a global cybersecurity company offering network security, cloud security, and security operations solutions. With over 85,000 clients worldwide, the company is renowned for its innovative technology, combining firewalls, AI-powered threat monitoring, and cloud-based defense systems to combat cybersecurity threats. Established in 2005 and headquartered in Santa Clara, California, Palo Alto Networks has emerged as a leader in the cybersecurity industry.

Despite its strong reputation, PANW shares have experienced an 8.9% decline year-to-date, performing below the broader market. The stock suffered a significant drop of 28% in one session following a downward revision of its full-year guidance in late February.

The guidance adjustment coincided with Palo Alto Networks’ 2Q earnings report on February 20. While the company exceeded analysts’ revenue expectations with $1.98 billion for the quarter and surpassed earnings per share estimates at $1.46, it revised its full-year billings forecast to $10.10 – $10.20 billion and its revenue forecast to $7.95 billion – $8.0 billion. This revision was attributed to a strategic shift towards AI-powered products, impacting revenue and billings in the near term.

Noteworthy Endorsements and Analyst Recommendations

During the period of PANW’s earnings sell-off, the stock garnered attention with a significant endorsement from former Speaker of the House and current Rep. Nancy Pelosi (D-CA). Pelosi disclosed the purchase of PANW call options valued up to $1.25 million, and the stock subsequently became a smaller holding in the Unusual Whales Democratic Trades ETF (NANC), which tracks politicians’ trading activity.

On the brokerage side, Argus maintained its “Buy” rating on PANW and raised its price target from $290 to $336. Analyst Joseph Bronner suggested that the market’s reaction to the guidance revision was excessive, citing the ongoing demand for cybersecurity software amidst a challenging environment. Bronner indicated that PANW’s strategic shift should cease to impact revenue and billings growth by July 2025, projecting a 25.1% potential upside from Monday’s close.

Analysts’ Consensus and Outlook

Argus’s bullish outlook aligns with the broader sentiment on Wall Street. Analysts maintain a consensus “Moderate Buy” rating on PANW stock, with a mean price target of $335.55, representing a potential upside of 24.9%. Out of 40 analysts covering the stock, 27 rates it as “Strong Buy,” 2 as “Moderate Buy,” and the remaining 11 as “Hold” on Palo Alto Networks stock.

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